Different People; Same Money Troubles

The great thing about my line of work is that I get to meet all kinds of different people. My clients come from every conceivable background you could think of. Every race, every ethnicity, every age group, every income bracket, and every education level. You name the demographic, and I got a client who fits the bill.
And what that tells me is this: No matter who you are or where you come from, if you’re not careful you could end up with a lot of stress in your life, all because of bad financial related decisions. And believe me when I tell you, it’s real easy to make bad decisions about money.
Furthermore, my very diverse clientele have made a lot of the same financial mistakes, and the effects of those mistakes on my clients’ lives are the same.
This is one point I’m trying to hammer home with this blog of mine. Having a good education and a high income are both great things, but by themselves they won’t necessarily keep a person out of financial difficulties. This blog, though, hopefully will.

To Owe or be Owed; that is the Question

The other day I was talking to one of my clients who was way behind on her bills, and she told me how she was getting collection calls left and right. It was so bad, she had to unplug her home telephone, and she had keep her cell phone on silent because it wouldn’t stop ringing. She actually had to keep the cell phone plugged in all the time, because, so help me God, the battery kept dying because it was always getting calls from debt collectors.
Man I felt bad for her. It reminded me of something I was told when I was young, before I ever became a financial counselor. I knew a guy named Kenny who owned a bar I liked to hang out at. One day I was in his bar, and some ad sales rep came in to sell him some ads. I watched Kenny tell the guy that he was going to pay him for three months worth of advertisements in advance even though the sales guy offered to bill him monthly. When the guy left, I asked Kenny why he’d want to pay more than was required.
I’ll never forget what he said to me in that rough, gravelly voice of his: “I don’t like to owe people money. I’d rather have somebody owe me, instead of me owe them.” I didn’t really get it at the time, but seeing what my clients go through, I get it now.
In his younger days, Kenny was a member of a biker gang, and one his club’s activities was loaning out money at high interest rates to people who couldn’t go to a bank. The technical term for this is loansharking. And when you don’t pay your loanshark, your phone doesn’t ring off the hook; instead your thumbs get broke.
And while it’s no fun to walk around in a cast, it’s a pretty big pain too to always have your cell battery constantly die on you. My point is this: it doesn’t matter who you borrow money from, if you can’t pay what you owe when it’s due, your life is going to have stress in it. Like Kenny said, it’s better to have people owe you, instead of owing other people.

Man Swears he’s Never Missed a House Payment, but there’s a Foreclosure Notice on his Door

How’s this for a housing horror story: Imagine you’re living your life, things are all hunky-dory, and then one day you come home from work to find a foreclosure notice on your front door. When you call your mortgage servicing company, they tell you that your mortgage is six payments behind, you owe them a ton of money, and they’ve begun foreclosure proceedings to sell the house. And as far as you know, you’ve been making your payments every month like clockwork.
This is what happened to a man named Tim, who called me after pulling his hair out dealing with the mortgage company for a month..
“I called the bank when I got their notice, and they said it’s no mistake, somehow my loan is behind and they want to foreclose. How can this be?”
Tim swore he had never missed a house payment, and had never been notified by the servicer that his loan was past due. Which is odd, because usually if you miss a payment on a debt, that creditor is going to hound you night and day about it.
Now, if Tim had made all the payments, this should have been fairly easy to prove. But the problem was this: Tim had his house payment automatically deducted from his bank account electronically every month. And the bank that had his checking account, which Tim’s house payments came from,  was the same bank that serviced the mortgage. Some of the missed payments were from over three years ago, and they told Tim that yes, they could research the bank account to check on whether the payments had come out, but because the dates in question were so far in the past, it would take them several months to do the research. Meanwhile, the bank planned to auction the house in the next month.
“This is a nightmare,” Tim said.
That was putting it mildly.